Mortgage rates are at their lowest in four years.

 

The lowest I’ve seen is a 5/6 ARM loan at ~4.5% with US Bank (with assets under management and other conditions). Their suggestion? Get a short-term loan, and then refinance into a 30-year fixed mortgage when rates drop below that (which is projected by year-end).

 

Other banks, like City National Bank, and smaller lenders, like New American Funding, are issuing rates in the low 5s and high 4s for similar products (without assets under management).

 

That means if you bought your home or refinanced anytime after September 2022 and your interest rate is 6 or even 7%+, it's time to talk to a lender. Depending on the size of the loan, a 1-2% rate difference can mean savings of thousands a month and tens of thousands over the life of the loan. 

 

 

There are some requirements for the best rates. The loan has to be “jumbo” (meaning over $1,250,000), and for most, you need at least $250,000 (sometimes millions of dollars) on deposit to get those sub-5 rates. (Pro tip: you don’t have to keep it in there.) 
 

Even if you can’t get a rate that low, dropping your rate from 7% to low to mid-5s will make a meaningful difference in your bank account. So what if you have to eat $5K in fees? If you drop your payment even $500/mo, you get all your money back in less than a year.

 

Remember, lowering your interest rate doesn’t just lower your payment. For most loan products, the lower your rate, the more of your payment goes toward paying down your principal. 
 

 

We have been waiting years for rates to get this good. And just in time…because the 2.875% rate on my & Lori's personal home is about to adjust, way up.

 

I thought my biggest financial mistake was getting a low adjustable rate mortgage instead of a 30yr fixed when we bought our home in 2018.

 

At the time, we opted for a 7/1 ARM at 2.875% instead of a 4.25% 30yr. I was kicking myself for years, but it looks like I might have the last laugh on this one – for seven years, we've enjoyed a very low payment, with lots of principal paydown (almost half my payment is principal). 

 

And when it’s due to “adjust” this December (the rate will more than double), I’ll be happily refi'd in a rate not much higher than I could have had back then. And we're adding in our $500k HELOC into one rate, because the best rates right now are for jumbo loans. Bing, bop, boom.
 

 

Lori's best friend just refinanced with City National Bank from a 6.5% rate into a low 5s rate and was able to pull money out of her home! I haven't seen that in years, and it's frankly how I built my real estate portfolio (BRRRR - Buy, Renovate, Rent, Refinance, Repeat).

 

And, Lori was talking to her nail salon owner who has a crazy high rate for her home, and had no idea that rates in the 5s were available. So, after her nails dried, Lori put her in touch with a lender to refinance.

 

 

Remember: Saving money is making money, so consider this a PSA for all those who didn't know. Your time has come.
 

P.S. Reply to this email to be put into touch with a lender to refinance your home, or get a great rate to start home shopping.